How to Develop Key Performance Indicators - 6 Steps for Great KPIs

how to develop key performance indicators is a very important process to allow you to effectively manage greater amounts of activity how you use kpis will help you drive the right behaviors and activities which in turn drives better results select the right key performance indicators and use them well and you increase the chances of reaching your goals select the wrong kpis or only partially effective kpis and you create distractions or cause your team to focus on the wrong areas you know many companies are good at writing strategy only a few are good at implementing their strategies

developing key performance indicators is a vital step in implementation nearly every manager will use or create kpis especially when thinking about how to measure team performance to help you understand and choose performance enhancing key performance indicators we're going through these six steps [Music] Peter drucker's quote you can't manage what you can't measure holds very true if you want others to focus on what is important to you and the business and deliver the results you need [Music] foreign my name is Jess Coles and I've had a 25-year management career in corporates and household names through to

smes learning how to develop key performance indicators massively helped me successfully manage increasingly complex projects and bigger teams if you're new to this channel enhance.training shares business and people management expertise to help you improve your performance and that of your team in business and if you like this video please give it a thumbs up and subscribe kpis are used to create and measure progress towards your most important goals what you spend your time looking at talking about and checking as a manager is what is going to be important to your team and what they will

focus their time and efforts on when thinking about how to evaluate team performance project performance business performance good kpis are in valuable tool the first step in how to develop key performance indicators is always start with your goals using kpis could properly drives team behavior and effort focus and attention on the important goals increases the likelihood of reaching those goals which is obviously good for everyone yeah this could be implementing the company strategy or it could be realizing departmental medium-term goals or it could be day-to-day goals always start with the goals that you're trying to

reach the result you intend to get to When developing key performance indicators find the goal or objective clearly make it as specific as possible you know a good test will a stranger understand exactly when you've reached your goal always write your goal or objective down writing forces you to think about and articulate your goal more clearly I would share your goal with your manager and other important stakeholders writing it down and circulating your goals or objectives will reduce future issues such as goal creep or changing expectations and this step will also ensure your goals tie

into the bigger picture goals of the company and other departments always start with clear smart goals or objectives the second step in how to develop kpis is Define the questions you need answering once you have a clear goal defined written down and circulated then you can start working out how you're going to get to that goal plan out the different routes or series of steps if you like available to reach your goals if you haven't already when you've chosen your preferred route and you know the steps and the outcomes you're seeking from each step you

can start to think about the behavior you want to encourage using kpis you have an example of the question you might ask When developing kpis is you know what is the top two or three activities or projects we need to consistently undertake so we meet our goals and deliver the flagship results needed you're a straightful example the goal is to drive an extra 5 million in sales at a recruitment company the steps in general terms could be you know first to do more and better quality prospecting activities secondly it could be improving the number of

calls and meetings held with clients following the prospecting activities third it could be to increase the number of vacancies given to filled by our clients and then fourth it could be to improve the success rate of filling those vacancies measuring employee performance through these four stages and improving it will help you earn that extra 5 million targeted you might decide that prospecting is the most important activity as the rest won't happen without it your most important kpi to drive volume and quality of prospecting might be the number of prospecting phone calls made decide exactly what

questions you need to answer to drive progress to your goals the third step in how to develop key performance indicators is to identify the data to support your kpis don't start the step by looking at what information you have this is the wrong approach and often leads to settling for okay rather than great kpis work out exactly what dates you need to track progress on the kpis that you have selected make sure the kpis drive the right behaviors and thus the right results get your Finance team to help work out how to capture and collate

the data needed think about what additional inputs might be needed yeah I've taken the previous example we're talking about it could be recording outbound call volume and length on the CRM system if capturing this data is too hard or too expensive ask the finance team your manager or your team members or anywhere else you can think of if they can come up with alternative measures which will drive the same behavior and results using kpis to drive actions will need data that is quick and relatively easy to collect if you can automate the collection of the

data perfect the fourth step in how to develop key performance indicators is to create ownership of the kpis one of the best ways of creating ownership of kpis is involving specific team members in designing the kpis and setting them up then handing over the collation review and reporting of those case pis is a pretty easy step getting others to manage kpis of course reduces your workload you'll need to regularly review the kpis which we'll talk about in a second always give ownership of a kpi to one specific person their responsibilities are to ensure that kpi

is produced accurately and reported on time not necessarily to do all the work to put those kpis together explain the importance and the context of the kpi and how you're going to use the kpi to the person you're assigning it to this will increase the likelihood they will own it ask one specific person to own each kpi the fifth step in how to develop key performance indicators is to build visibility accountability and discussion of the kpis having a nice set of kpis is pointless unless you use them to drive behavior and action a key step

to achieve both is building visibility of the kpis here are six ideas of how to do this firstly send around a weekly kpi email to team members and stakeholders secondly talk about the kpis in team meetings and on one-on-one meetings third meet to go through kpis with stakeholders and your manager fourth put the kpis on a whiteboard in full view of the team or use a TV screen fifth hold huddle meetings each day or week and get team members to update the kpi they own on a scoreboard and sixth whole planning meetings to work out

how to improve the results the kpis are tracking in short do everything you can to keep the kpis visible and in the front of people's minds visibility helps create accountability as Everyone likes to be seen to be doing well and no one wants to be lost utilizing peer pressure is a powerful tool combined with team performance tracking any group member will feel the need to contribute and do their share take every opportunity to discuss the kpis you're tracking keep asking are these still the right ones to drive us towards our goals as more complex projects

progress or improvements are actually implemented change the focus of kpis is common focus on what is most important build visibility and accountability by communicating the progress using your kpis the sixth step in how to develop key performance indicators is to interpret results and take action you must take action or get your team members to take action taking action is where the value is created and how you progress more quickly towards your goals using key performance indicators is a great way to find the trouble spots quickly and then dig into the detail around these increase the

activities which speed up progress towards your goals and reduce what doesn't appear to be working keep asking yourself you know why is progress where it is secondly what can I do to increase progress being made what can I do to anticipate possible problems and sidestep these problems to keep progress on track and all similar questions keep looking and planning ahead if you are behind plan out what actions you can take and will take to get back on track if you are ahead what actions can be taken to get further ahead use kpis to make it

easy to spot good or bad performance and take action accordingly how to develop key performance indicators is a very useful skill to develop for any manager managing what you can't measure is a lot harder measurement of progress is a core tool for every manager when you have your kpis work hard to make sure the team stakeholders and your manager are aware of progress and you and your team are focused on actions that are practical and sensible to take to improve progress to recap the six steps for how to develop key performance indicators are firstly always

start with your goals secondly Define the questions you need answering third identify the data to support your kpis fourth create ownership of the kpis fifth building visibility accountability and discussion of the kpis and then sixth interpret the results and take action if you have any questions please leave them in the comment section below and I'll get back to you as quickly as possible thanks very much for watching and I look forward to speaking to you again soon [Music]